This week the United States federal government was shut down after Congress failed to come up with a budget plan for the new fiscal year. Officials had spent much of the previous week arguing over funding for the President’s legislative centerpiece the Affordable Care Act. With both parties refusing concessions, the United States has found itself in a situation not seen since the mid-1990’s. Over 800,000 federal employees have been furloughed, public parks and museums have been closed, and various agency activities are put on hold. But how does this domestic issue affect U.S. foreign aid agencies like USAID? So far, not very much.

One way USAID stands out from other agencies are multi-year and no-year appropriations. These either extend until the resources run out or are guaranteed past the initial fiscal year. Certain operations funded by these contracts may continue to operate regardless of an agreement on funding for fiscal year 2014. Operations abroad are often funded in this manner as well and should not be affected by the shutdown in the near future. USAID will continue to honor existing contracts; however they are delaying new agreements unless necessary to protect life and property. Travel and events previously organized and funded will continue as planned. New events are discouraged and new travel arrangements must be specifically approved.

Though USAID seems to be operating with little impairment for now, certain operations can only go on for so long without new appropriations. The uncertainty of the future also has a negative impact on the perception of the United States abroad. NGOs funded by USAID are made nervous by the prospect of losing a major budget source due to unrelated domestic issues within the U.S. One would hope that Congress’ inability to pass a budget is not a preview for the upcoming debt ceiling vote which would have a significantly more devastating impact on the global economy.

The Center for Global Prosperity is focused on educating policy leaders and the general public on the crucial role of the private sector (both non and for profit) as a source of economic growth and prosperity around the world. To accomplish this central mission, the Center produces The Index of Global Philanthropy and Remittances, which identifies the sources and amounts of private giving around the world and The Index of Philanthropic Freedom, which identifies the barriers and incentives to private giving in 64 countries.